SPEND! SPEND! SPEND!(Tyco Internaitonal CEO L. Dennis Kozlowski)

On a Friday afternoon last May, Mark Belnick, the general counsel of Tyco International, the giant industrial conglomerate, hurried into the Boca Raton office of the company's chairman and chief executive officer, L. Dennis Kozlowski. Belnick had with him a copy of a grand-jury subpoena that had just been served on the company, and that named Kozlowski personally.

Kozlowski stared at the text, which called for documents "reflecting all transactions between Tyco International . . . and Alexander Apsis or Alexander Apsis Fine Arts, LLC from 1999 to the present." The subpoena evidently concerned some paintings that Kozlowski had bought the previous year, after he had decided to become a serious art collector. They included a Monet and a Renoir. For the Monet, he had paid $3.95 million; for the Renoir, $5.5 million.

After studying the subpoena, Kozlowski picked up the phone and called Christine Berry, who worked for Fine Collections Management, in West Palm Beach, and was Kozlowski's art adviser. She had taken him to various galleries and negotiated the purchase of the paintings. According to Kozlowski, the following conversation ensued:

"Who did we buy the Monet from?" he asked.

Berry answered that the seller was Alexander Apsis, a dealer and former specialist for Sotheby's in London and New York. Without mentioning that he'd just received a subpoena, Kozlowski began questioning Berry about the purchase of the painting and the details of its delivery to his office at Tyco's headquarters, in Exeter, New Hampshire. "Do you mind if my lawyer gets on the phone?" Kozlowski asked.

Berry didn't answer immediately. By having the art shipped to New Hampshire, Kozlowski had avoided paying New York State's 8.25-per-cent sales tax--some $325,000 on the Monet alone. She told Kozlowski that she didn't want to talk to the lawyer, and needed to check her records and get back to him.

Three days later, on Monday, May 6th, Berry sent Kozlowski a fax: